Council leaders have urged the Government not to make any further cuts in the Autumn Budget, warning that councils face ‘systemic financial failure’ and are increasingly forced to draw on reserves.
In its submission to the Treasury ahead of the Budget, the Local Government Association (LGA) said that English councils face a £2.3bn funding gap in 2025/26, rising to £3.9bn in 2026/27.
The association also highlighted that councils’ un-ringfenced reserves fell by £1.7bn in 2022/23 and £1.1bn in 2023/24. Some 42% of councils drew on their reserves in both years.
The LGA also added that there was a growing risk of ‘systemic financial failure’ as 18 councils are dependent on receiving Exceptional Financial Support in February to balance their books in 2024/25.
LGA chair Cllr Louise Gittins said that local authorities had already delivered £24.5bn in cuts and efficiencies, adding that ‘any further cuts on top of this would be disastrous.’
